This week’s GAAP Flash includes articles about updates to the new revenue recognition standard (ASC 606), FCPA fines, a huge impairment loss under ASC 350, and other accounting news provided to help increase business acumen of CPAs.

FASB Issues Technical Improvements to Revenue Standard (December 22, 2016) – Journal of Accountancy (@AICPA_JofA)

The FASB issued ASU 2016-20 in late December to address 13 narrow-scope issues within its new revenue recognition standard (ASC 606). The amendments have the same effective date as the standard itself, which is annual and interim periods beginning after December 15, 2017 for public companies. KPMG does a good job explaining the changes in its publication, Defining Issues (No. 16-41) available here.

How It’s Relevant: Did you catch that? Annual periods beginning after December 15, 2017. And just in case you’re not that quick on the uptake, that’s next year! As we learned at the AICPA Conference in D.C. last month, half of the companies have either not started, are getting familiar with, or still performing their initial assessment of the impacts of the new revenue recognition standard. Don’t delay. Start today! You might want to start with our free, 1-hour eLearning module.

Wire and Cable Manufacturer Settles FCPA and Accounting Charges (December 29, 2016) – The Securities and Exchange Commission (@SEC_News)

General Cable Corporation agreed to pay more than $75 million to resolve investigations by the SEC and DOJ related to FCPA violations. This was in addition to the $6.5 million penalty to settle separate accounting-related violations. The SEC alleges General Cable made improper payments to foreign officials to obtain or retain business. Furthermore, the company did not have “effective compliance programs and internal controls necessary to proactively address corruption risks and accounting errors.”

How It’s Relevant: General Cable is just the latest company, in what seems to be a weekly occurrence, to be busted for violations of the foreign corrupt practices act (FCPA). Need a refresher? We’ve summarized the requirements of the FCPA in this post. Do you think you can spot FCPA violations? Take our free, eLearning module/quiz to find out!

Toshiba Expects Write-Down of as Much as Several Billion Dollars (December 29, 2016) – The Wall Street Journal (@wsj)

Toshiba Corp. said cost overruns will likely force the company to take an impairment loss of several billion dollars. This is same company that was mired in an accounting scandal in 2015. Not good! The warning sent the stock tumbling, down 11.6%.

How It’s Relevant: Mergers and acquisitions (M&A) activity is up and so is goodwill impairment under ASC 350. Why? We think it is mainly due to volatility within currency and commodity markets. However, companies are not out of the woods yet! As interest rates rise, market participants would expect a greater return on their investment. This will inevitably cause the fair value of reporting units to go down, yielding even more impairments. It is certainly an issue the auditors should be checking during their year-end audits. Need a refresher of the rules under U.S. GAAP? No worries, we’ve got you covered in this post.

PCAOB Staff Offers Guidance on Audit Firms’ Work in China (December 30, 2016) – Accounting Today (@AcountingToday)

The PCAOB published a document providing guidance from staff members about the obligations of PCAOB-registered firms when performing audits in China. It relates to firms based outside mainland China, particularly those based in the U.S. that provide issuer audit services they understand to be subject to Chinese regulations, including the MOF Rule issued by the Chinese Ministry of Finance.

How It’s Relevant: To date, the PCAOB has had limited access to inspect firms conducting audits in China. Perhaps President-elect Trump will tweet about it and make it all better! Until then, if your conducting a PCAOB audit, we recommend you understand the rules or face a dreaded audit deficiency within your PCAOB inspection report. Learn from the mistakes of others in our free, eBook Learn from PCAOB Inspection Reports available here.

SEC Chief Says Don’t Give Up on Global Accounting Push (January 5, 2017) – The Wall Street Journal (@wsj)

According outgoing SEC Chairman Mary Jo White, the Commission should continue to work toward advancing high-quality, globally accepted accounting rules as “one of its highest priorities.” Of course, it really isn’t here decision, but rather one for incoming chairman-designate Jay Clayton. Do you honestly think that a Trump nominee will push for globally accepted accounting rules?

How It’s Relevant: The current SEC Chief Accountant said the U.S. won’t switch to IFRS in the “foreseeable future” in a speech made at the AICPA Conference. Furthermore, the three main accounting standards coming out of the joint FASB/IASB convergence project (revenue from contracts with customers, leases, and credit losses) are not converged! I will be retired before we have a one-world GAAP. Until then, I recommend that all accountants be bi-lingual in both U.S. GAAP and IFRS.